MOSS ADAMS CAPITAL: Apparel and foowear market monitor highlights notable deals, stock prices and results.
Details on Industry Insight.
Globe International Limited spent the last year reorganizing operations and revamping its brands to reduce costs and drive sales, the company said in an earnings report for the year ended June 30.
Among the big changes: Restructuring its core skateboard division, Dwindle Distribution.
Globe posted a net loss after tax of A$6 million vs. a net profit of A$0.1 million in the same period last year. Total sales edged up 2% to A$83.8 million.
The increase was driven mostly by the company’s flagship Globe brand, which grew 10%.
Globe said that it has been adjusting its brand and product mix to create a more balanced portfolio in the boardsports, streetwear, fashion and workwear markets.
The company has its own brands, such as Globe, and distributes others under license, including Obey and Neff in Australia. The company also recently acquired the Stussy Clothing and Vision Streetwear licenses for Australia and New Zealand, which are distributed under its 4Front division.
Globe posted an EBITDA loss of A$4.7 largely due to “one-off costs” totaling A$4.25 million. Those included delayed shipments of A$1.5 million and new brand set up costs of A$.7 million.
The company also spent A$1.35 million to restructure Dwindle, which saw revenue drop 15% for the year. Dwindle now has a reduced cost base and brand mix, Globe said.
But a bright spot for Dwindle was Dusters, a line of retro cruiser skateboards launched last year that Globe said has grown quickly to become the second largest Dwindle brand.
Some highlights by region:
The Globe brand recorded a strong year in North America, with brand sales growing 14% in the region.
A new focus in the region is Globe apparel, where the company has made a “significant investment.”
The Globe brand’s growth was offset by Dwindle’s struggles, which caused the North American region’s revenues to drop by 6% to A$39.3 million, the company said.
Globe’s European division grew 16% to A$18.1 million, due to across-the-board growth in footwear, apparel, socks and skate hardgoods.
The company now has a platform in place and is looking to add brands to its division there.
The company’s Australian division posted a revenue gain of 7% to A$26.6 million due to Obey clothing and the launch of the FXD workwear brand, which the company said has “far exceeded expectations in its launch year.”